Australia’s dollar fell against all of its 16 major peers after data today showed the nation’s consumer prices increased less than economists forecast.
China’s yuan touched the weakest level in 16 months, while the Aussie dropped to a two-week low after a private report signaled manufacturing contracted for a fourth straight month in the world’s second-biggest economy. The dollar was near a two-week high against the yen before U.S. reports on manufacturing and new home sales that may add to signs the economy is improving. The central banks in the U.S. and Japan will set monetary policy next week.
“The CPI number undershot most analyst expectations and that’s put the Aussie under some intraday downward pressure,” said Peter Dragicevich, a currency strategist at Commonwealth Bank of Australia in Sydney. “It shouldn’t change the fundamental backdrop for the Aussie and we don’t think this move will extend too much further. Good support will probably be found down toward 92.47 cents.”